Infographic Does A Great Job Misrepresenting Opportunities Of The Digital Era

from the ooo-pretty-charts dept

Wed, Apr 14th 2010 8:59pm — Dennis Yang

This infographic depicts the number of sales that must be made in order for a solo artist to make "minimum wage" in a month. The graphic is obviously meant to be a bit shocking, but even the slightest bit of digging turns it into more of a shoulder shrug. First of all, it is a bit misleading in that it compares not quite apples to oranges, but apples to apple slices to apple sauce to apple juice -- all in one chart. It compares albums and singles and streams all on the same scale, which is a bit unfair. If you sell 1 album for $9.99 (that had 10 tracks on it), then of course you would expect to have to sell (roughly) 10 times as many tracks for $0.99 to make the same amount of money -- that's not really much of a revelation. By looking at the data, we can compare apples to apples and get a better sense of what is going on:

format average retail price musician revenue sales to earn min. wage

Self-Pressed CD $9.99 $8.09 143

iTunes Album Download $9.99 0.94 1,229

cdbaby Album download $9.99 7.49 155

Retail Label-backed CD $9.99 $0.30 3,871

format	average retail price	musician revenue	sales to earn min. wage
Self-Pressed CD	$9.99	$8.09	143
iTunes Album Download	$9.99	0.94	1,229
cdbaby Album download	$9.99	7.49	155
Retail Label-backed CD	$9.99	$0.30	3,871

Clearly, it's difficult to make a living simply by selling albums, but it's always been that way. Musicians have long known that in order to make real money, they'd either have to be U2 big, or tour. However, it's very interesting to note that in the new, digital era, artists actually make more off of their album sales in iTunes than they did in the old, physical world. And selling albums digitally through cdbaby, without a label, stands to bring in much, much more money for the artist -- and frees them from the headache of distributing a physical product. The band Pomplamoose, for example, is making a perfectly good living doing just that.

Moving on, the data claims that to make minimum wage, an artist would need 4.6M plays on a streaming service like Spotify. While that might be technically true, it's a pretty meaningless calculation. It does not take into account the promotional value of streaming -- and unlike selling 143 CDs, getting 4.6M plays of a digital track would certainly lead to significant revenue elsewhere. Surely an artist would be able to translate that much attention into successful live shows or their own CwF+RtB offering. After all, we've seen time and time again that focusing on something as narrow as money earned per track sold (or streamed play) is a limited way to view a musician's earning potential.

So, while at first glance, this infographic may seem pessimistic, digging a little deeper into the data gives the real story. Exciting opportunities still abound in the world of music for those creative enough to seize them.

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Filed Under: infographics, music industry

25 Comments

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Anonymous Coward, 14 Apr 2010 @ 10:03pm

typical techdirt post, misleading at best. you cannot look at a narrow part of the income stream and say it is good or bad. what percentage of label bands sell 50,000 copies? what percentage of cdbaby bands sell even 155 copies? what about radio airplay? what about song writer royalties? where are the full numbers?
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Nick Coghlan (profile), 14 Apr 2010 @ 10:46pm

I think you're agreeing with what the graphic shows
While you're right that the graphic blends all sorts of different things together, it is still a good illustration of the relative significance of "unit sales" via different channels when it comes to artists' incomes.

You're right in saying an album is not a track is not a streaming "listen", but that's *exactly* what the graphic shows. See how the number of album sales needed to make minimum wage under a low end record deal is actually higher than the number of track sales needed through cdbaby. That's an *excellent* illustration of the point that many bands are actually much better off now than they were under the old record label controlled system, because the artists got such a lousy deal. And selling entire albums through CD baby nets you a significantly better deal than even the biggest artists get from their labels, while still giving you global reach.

Basically, I think you're reading into the chart an agenda that isn't there. Yes, it focuses in on presenting one specific aspect of the data, but that's exactly what a good visualisation of a data set *should* do (it's also why relying overly on any one view of a data set is a bad idea - you need to consider the data from multiple angles in order to even begin to understand it).

Now, an interesting number that isn't highlighted in the graphic is the return on investment of the different mechanisms - what are the up-front costs associated with distribution once you have the master recording in your hands (we'll assume the studio costs are the same regardless). That's where the cdbaby-style systems really come into their own. With self-pressed CDs you have an inventory management problem - you can only print as many CDs as you can pay for up front, and if you print more than you end up selling you'll lose money instead of making it. With record labels, you have to earn out your advance (and their accounting shenanigans mean that will most likely never happen).

With CD baby, for as little as US$55, you can make your music available through a large number of channels, and your music is then available worldwide. That leaves the old models in the dust, even before you get into "CwF+RtB" schemes.
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harbingerofdoom (profile), 14 Apr 2010 @ 11:25pm

Re:
so, you decide to stop by just to say that you cant do exactly what the article is saying you cant do?

funny how you managed to agree 100% with the article yet still feel the need to start out with the idea that the article is "misleading at best".
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Anonymous Coward, 14 Apr 2010 @ 11:56pm

Re: Re:
no you missed it. record label backed needs 3871 but most label acts will sell 50k, making by this report more than 15 times minimum wage. they would have to have a truly bet seller on cdbaby to make similar actual money. relative numbers are nothing actual sales matter. plus this all goes against the masnick way as all music free.
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bigmike, 15 Apr 2010 @ 12:13am

amazon vs. cdbaby
Does Amazon really get 89% of the revenue from an artists download? That seems a bit surprising that they would be able to compete with CDbaby in that case. One would think that non-label artists would flock there.

Also, how does Pandora radio play into this concept? How much of a cut is taken if the purchase is redirected from their site?
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Peet McKimmie (profile), 15 Apr 2010 @ 2:17am

"Sales to earn minimum wage"
This is meaningless unless you specify a period. Is it sales per week? Per month? Per year? Over the artist's lifetime?
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btrussell (profile), 15 Apr 2010 @ 2:21am

Re: Re: Re:
Less than 15

Therefore, sign away all rights for a years worth of minimum wage.

Sounds like the labels offer a real bargoon.
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btrussell (profile), 15 Apr 2010 @ 2:23am

Re: "Sales to earn minimum wage"
If you read the article, it will tell you.
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Planespotter (profile), 15 Apr 2010 @ 2:50am

I just love that the chart reproduced by Mike shows just how much revenue goes to the artist when signed to a label compared to going it alone.. I must use this the next time someone tells me that Labels are the best deal for any upcoming artist/band.
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Anonymous Coward, 15 Apr 2010 @ 5:08am

Re: Re: Re: Re:
a bargoon, sold by a goon
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Anonymous Coward, 15 Apr 2010 @ 5:55am

Re: Re: Re: Re:
not a years worth of minimum wage at least a years worth of almost 15 times minimum wage. also not sign away all rights no indication of that here. fail.
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Anonymous Coward, 15 Apr 2010 @ 6:35am

Re:
it makes more sense when it is put next to average sales per artist per year. suddenly the label deal is so much better.
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Chronno S. Trigger (profile), 15 Apr 2010 @ 6:39am

Re: Re: Re: Re: Re:
You seem to be in the RIAA's pocket so maybe you would know. Douse this $0.30 per album take into account the payback for the loan that the record label requires the artist to pay back before they start making money? Douse that "15 times minimum wage"* make enough money to pay back that loan?

*you assume that they sell all of the 50,000 album average each year, every year.

I don't know about you but I think I would go with the solo option. I wouldn't have to sell all 50,000 albums a year, and if I did, bonus.
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JEDIDIAH, 15 Apr 2010 @ 7:31am

One hit wonders and such.
No. The post brought up that question. Sure, it didn't answer it. However, it did answer it.

...which reminds me. There are plenty of bands that fade into obscurity because they don't sell enough records and get dropped by the label. Then there are bands that aren't selling enough and are forced by their label to make a major format change (or be dropped by their label).

Jamie Rasset was sued for sharing a 40 year old recording from one of the latter.

It's easy to focus on the stars since they get all of the attention. Even the one hit wonders get more attention.
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JEDIDIAH, 15 Apr 2010 @ 7:42am

So called publisher support.
I think Courtney Love would have something to say about that.

A big label band is still stuck struggling to recoup ALL of the production and promotional costs of getting their work out there. The labels have zero incentive to be efficient about what they do since they can bill it all back to the bands.

If you're not pandering to the latest fad, that promotional support probably won't amount to anything worthwhile.
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Hephaestus (profile), 15 Apr 2010 @ 7:46am

"Clearly, it's difficult to make a living simply by selling albums, but it's always been that way."

What strikes me as cool is this shows how working with a record label is not in your best interest.

"cdbaby Album download $9.99 7.49 #155"
-vs-
"Retail Label-backed CD $9.99 $0.30 #3,871"

That doesnt take into account the need to recoup with a label. Enjoy your indentured servitude much?
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Anonymous Coward, 15 Apr 2010 @ 7:59am

Re: Re:
Really? Am I missing something here?

Assuming the sales using a label is 50,0000 for the year
50,000* $0.30 is $15,000

Meanwhile the label gets $9.69 per?
9.69 * 50,000 is $484,500

With cd baby to make $15,000 you'd need to sell
$15,000/$7.49 = 2003

So sell 2003 on cd Baby or 50,000 with a label.
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Karl (profile), 15 Apr 2010 @ 8:23am

Re: Misleading at best
what percentage of label bands sell 50,000 copies? what percentage of cdbaby bands sell even 155 copies?

The number of indie bands that sell 155 copies through CDBaby is much larger than the number of label bands that sell 50,000 copies.

what about radio airplay? what about song writer royalties?

Radio time is a very scarce resource, and the Big Four have a stranglehold on that resource, just as they always have. But more and more people are moving to the infinite resource that is internet radio.

Radio royalties have always been pretty small, even for famous songwriters. (It's about the same as the Spotify example.) Nobody ever got their music on the radio for royalties, they did it for promotion.
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btrussell (profile), 15 Apr 2010 @ 8:34am

Re: Re: Re: Re: Re:
How do you get with a label if not by signing away rights?

"This infographic depicts the number of sales that must be made in order for a solo artist to make "minimum wage" in a month."

50 000/ 3871 = 12.92 How do you get "more than 15?"(almost 15 now)

Or do you mean label acts sell 50 000/mo?

Pink Floyd, Dark side of the Moon(A top all time best selling album). 45 mil sold. Released in '73. Average 10,126 albums/mo.

FAIL
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btrussell (profile), 15 Apr 2010 @ 8:44am

Re: Re: Re: Re: Re: Re:
Oops! I made a mistake. $45 mil, not albums. Lets see, I paid for it 5 times at $20 a pop. So 10,126/20= 506 albums /mo
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Karl (profile), 15 Apr 2010 @ 8:50am

Re: Re: Re:
If you're an artist that can sell 50,000 albums on a major label, it's almost guaranteed that you'll be able to sell 2000 albums on CD Baby. Probably more like 10,000.

And you'd still own the rights to your music, and control how it's produced and marketed.
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Karl (profile), 15 Apr 2010 @ 9:09am

Recoup
That doesnt take into account the need to recoup with a label.

If you're an artist, you're going to have to pay that either way, so you're confusing the issue a bit.

Of course, if you're not on a label, you have the option of not paying $200/hour for recording costs plus $10,000 for mastering. Most artists don't have control over their recording costs (or, more often, will have to trade royalty "points" to get it).
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Anonymous Coward, 15 Apr 2010 @ 9:59am

Jay-Z said it best...
"Men lie, women lie, numbers don't." We all know musicians can't make money just off album sales, why are people still on this topic?? If they made money on albums then they wouldn't be doing anything else but trying to create new music...come on guys!
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Joel (profile), 15 Apr 2010 @ 10:01am

Re: Jay-Z said it best...
"Men lie, women lie, numbers don't." We all know musicians can't make money just off album sales, why are people still on this topic?? If they made money on albums then they wouldn't be doing anything else but trying to create new music...come on guys!

Don't know what happened, I was signed on...Anyway I don't like being an AC, so now you know it was me!
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John, 18 Apr 2010 @ 11:42am

ANd then there's the swag
Bands really make money from concerts and paraphernalia with their logos and names on them. So the music is only part of it. Make it big enough to command some money on tour, and you can do much much better.
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